SPECIAL REPORT: The $7.75 Million Question
While the Town Council debates policy, financial documents reveal a government operating without audits and draining its savings to pay the bills.
BLOOMFIELD, CT — An analysis of the Town’s January 2026 financial records, cross-referenced with court filings and credit agency reports, reveals a Finance Department struggling to maintain basic operations. While the Town Council debates policy, the machinery of financial oversight has broken down: the administration has gone four years without completing an audit, and its savings account is being drawn down rapidly to balance the budget.
Tonight, the Finance, Budget, Audit & Bonding Subcommittee will review a disclosure that reveals significant gaps in the town's financial health. Here is what the numbers say.
I. THE NUMBERS: BREACHING THE SAFETY NET
The Official Story: The administration claims the budget is balanced.
The Reality: The budget is balanced only by draining $7.75 million from savings, pushing the town below its own safety requirements.
According to the "Estimated Unassigned Fund Balance" schedule (Page 11 of the Jan 20, 2026 Presentation Materials), the Town plans to deduct $7,750,000 from its Unassigned Fund Balance (the portion of reserves not committed to specific purposes, commonly called the 'rainy day fund') this year. This will drop the town's "Rainy Day Fund" from $24.6 million to $16.9 million in a single 12-month period.
⚠️ THE DANGER ZONE: Dipping Below 15%
Bloomfield’s own Fund Balance Policy (Policy #141.04, adopted Nov 28, 2016) requires maintaining a reserve of at least 15% of the operating budget to protect our credit rating.
- Estimated Operating Budget (FY26): ~$116.5 Million
- Minimum Required Reserve (15%): $17.48 Million
- Projected Reserve (After Spending): $16.9 Million
Conclusion: Based on publicly available budget figures, this would place the reserve approximately $580,000 below the policy threshold—though the administration has not publicly addressed whether this constitutes a policy violation.
Where is the money going? The Bloomfield Community Dispatch analysis broke it down into two parts:
1. Paying the Daily Bills ($3.75 Million)
The "Status of Revenues" report shows an "Appropriated Fund Balance" line of $3,750,000. This is cash the administration plans to withdraw from savings just to pay for daily operating expenses—salaries, lights, and gas. Without this transfer, the town would be running a multi-million dollar operating deficit.
2. The Economic Development Transfer ($4.0 Million)
The remaining $4,000,000 corresponds to the transfer to the Economic Development Trust. As detailed in "The $4 Million Loophole," once funds are moved into this Trust, the council can spend them without the voter referendum required for appropriations over 1.5% of the budget (per Town Charter Ch. V).
Why It Matters: This aggressive reliance on savings to balance the budget is one of the practices S&P Global cited alongside late audits and management turnover in its decision to downgrade Bloomfield’s credit rating to AA on December 30, 2025. You can read the full S&P Global Report here.
The S&P report specifically cited Bloomfield's "management's continued use of fund balance to balance operations" as a contributing factor in the downgrade, alongside delayed audits and management turnover.
II. THE LEGAL BUDGET OVERRUN (174% UTILIZATION)
The Issue: While the Finance Department pleads poverty, the Department of Law (Line 0160) is spending money nearly twice as fast as budgeted.
- Budgeted Amount: $268,538
- Spent + Committed (Dec 31): $467,324
- Variance: 174% of budget utilized in 6 months.
Public records confirm the town has retained both the Crumbie Law Group and Wiggin and Dana for legal work related to budget challenges. Without detailed invoices—which have not been publicly released—the specific drivers of the 174% budget utilization in six months remain unclear, though outside counsel fees are a likely significant factor.
III. THE NEIGHBOR COMPARISON: THE STAFFING MYTH
In his January 7th memorandum, Finance Director Darrell Hill justifies the need for a new, high-salary "Senior Accountant" by citing staffing shortages. This is not a new excuse. Director Hill made these identical claims in his August 4, 2025 letter to the State Office of Policy and Management (OPM).
Since his arrival, the department has utilized temporary staffing and filled positions, yet the administration has not completed the FY2024 Audit. An administration serious about fixing the problem would have assessed the gap and executed a fix immediately; instead, Bloomfield has seen a cycle of repetitive complaints while the backlog grows.
Furthermore, a comparison with our neighbor, Rocky Hill, exposes the "staffing shortage" narrative:
| Metric | Bloomfield | Rocky Hill |
|---|---|---|
| Population | ~21,500 | ~20,800 |
| Credit Rating | AA (Negative Outlook) | AA+ (Stable) |
| Audit Status | Delinquent (4+ Years) | Compliant / On-Time |
| Finance Staff (FTE) | 4.5 (Asking for 5.5) | 3.0 (Lean Model) |
The Verdict: While direct municipal comparisons are limited by differences in organizational structure and assigned responsibilities, Rocky Hill's ability to maintain audit compliance with a smaller finance team raises questions about whether Bloomfield's challenges stem primarily from understaffing or from management and organizational issues. (Source: Rocky Hill FY25 Budget Book).
UPDATE: 6:45 PM EST ADMINISTRATION RESPONDS
The Bloomfield Community Dispatch submitted detailed questions to Finance Director Darrell Hill and Town Manager Alvin D. Schwapp, Jr. prior to publication, specifically requesting clarification on the calculated breach of the 15% Fund Balance Policy and the S&P downgrade factors.
Town Manager Schwapp responded via email at 6:38 PM EST, stating:
"Mr. Frank, I am responding on behalf of Mr. Hill, the staff of the Town of Bloomfield has no comment regarding your media inquiry."
Editor's Note: The administration declined to dispute the analysis regarding the S&P downgrade or the calculation that the projected $16.9 million fund balance falls below the town's mandatory safety threshold.
IV. QUESTIONS FOR THE COMMITTEE
In the interest of transparency, The Bloomfield Community Dispatch has submitted the following questions to the Finance Subcommittee regarding tonight's presentation. We are awaiting a response:
- Regarding the Surplus: Page 11 indicates a $7.75 million draw-down on the Unassigned Fund Balance. Can you confirm exactly how much of this total is allocated to the Economic Development Trust, and how much is being used to cover operating deficits?
- Regarding Reserve Policy: The projected ending Fund Balance of $16.9 million appears to fall below 15% of the projected operating budget ($17.4 million). Does the administration acknowledge this breach of the Town’s Fund Balance Policy, and what is the plan to cure it?
- Regarding Trust Fund Disbursements: Have any funds already been disbursed from the Economic Development Trust? If so, to whom were they paid, in what amounts, for what specific purposes, and who authorized the disbursements?
- Regarding Legal Encumbrances: Have funds been encumbered for the appeal of the Kirton lawsuit? If not, why has this liability not been booked? Please provide an estimate of the expected expense for this appeal.
- Regarding Staffing Efficiency: Given that peer municipalities like Rocky Hill operate compliant finance departments with 3.0 FTEs, why does Bloomfield require nearly twice as many staff members (5.5 FTEs) to perform the same statutory functions?
- Regarding Document Release: Will the Subcommittee vote tonight to immediately release the detailed financial records for the Law Department, including all invoices, retainer agreements, and letters of engagement for the Crumbie Law Group and Wiggin and Dana?
V. THE COUNTER-NARRATIVE: FACT-CHECKING THE VICTORY LAP
In a recent Op-Ed published in the Bloomfield Messenger (Jan 16, 2026), former Finance Chair Kenneth McClary describes the FY26 budget process as "responsible governance" and claims the recent court ruling validates the town's financial strategy.
However, when we overlay Mr. McClary's rhetoric with the actual data from tonight's Finance Report and the S&P Global downgrade, a starkly different picture emerges.
CLAIM #1: "It was about responsible governance and making difficult but necessary decisions."
THE RECORD: Town financial documents presented tonight show the Fund Balance dropping to $16.9 million—which, based on the estimated $116.5M operating budget, would fall approximately $500,000 below the 15% policy minimum of $17.4M. S&P Global's December 30, 2025 downgrade specifically cited fund balance drawdowns to balance operations, alongside late audits and management turnover[cite: 31, 35].
CLAIM #2: "This ruling confirms what many of us said from the very beginning. The budget process was legal, transparent, and fully compliant."
THE RECORD: The Superior Court ruled that the FY2026 budget process, including the $4 million transfer, complied with the town charter and was not subject to an additional referendum. However, the court's finding of legal compliance does not address the separate question of transparency. Tonight's financial documents show that $3.75 million of "Appropriated Fund Balance" is being used to cover operating expenses, while the administration has gone four years without completing a financial audit—the primary transparency mechanism required by state law[cite: 31, 46].
CLAIM #3: "It is deeply troubling that more than $100,000 in unbudgeted taxpayer funds... were spent defending a meritless lawsuit."
THE RECORD: While the lawsuit cost approximately $100,000, tonight's financial documents show the administration drawing down $7.75 million from reserves—more than 75 times the cost of the litigation. The lawsuit costs represent approximately 1.3% of the total fund balance reduction.
The Bottom Line: You cannot claim "victory" while simultaneously overseeing a credit downgrade and a breach of your own financial safety policies.
Editor's Note: All financial figures in this analysis are derived from documents in the January 20, 2026 Finance Subcommittee meeting packet and publicly available records. Calculations regarding fund balance policy compliance are based on publicly stated budget figures. The Bloomfield Community Dispatch has requested clarification from the administration on all figures cited and will update this article if additional information becomes available.